The story of the diversity, equity, and inclusion movement in corporate America has turned dark over the past year.
Legal challenges from conservative groups targeting companies they consider too “woke” have forced several businesses to withdraw from DEI programs. A string of chief diversity officers for leading firms, not to mention the White House, have left their posts or been pushed out. And the U.S. Has seen anti-DEI agitators launch ugly, hate-filled boycotts of brands that dare to hold their ground.
Chief marketing officers, too, have seen budgets dedicated to inclusive advertising shrink. Typically, these budgets go toward ensuring campaigns are representative of the American population, making explicit spots celebrating inclusion, diversifying marketing teams, or other similar practices. According to data from the latest CMO Survey, an annual report conducted by Duke University’s Fuqua School of Business in partnership with Deloitte, spending on inclusive marketing grew by nearly 9% to about 11% annually from 2021 to 2023. But last year’s results, first published last fall, showed that growth in DEI marketing spending slowed to 2.3%, a 79% drop from 2022.
The report didn’t address the reasons spending was scaled back, but Christine Moorman, a Duke University business professor and the founder and managing director of the CMO Survey, explains in a new paper that one likely reason is that companies did not see a worthwhile return on investment when they poured resources into DEI marketing. For the money spent, many firms failed to see a corresponding bump in stock value, sales growth, or the acquisition and retention of customers and employees. America’s culture wars may also be eroding the appetite for diversity in marketing, the professor tells Coins2Day.
But the fuller story is more nuanced. Moorman and her coauthor Michelle Seals, an MBA candidate at Duke, hypothesize that the businesses that did see positive returns from DEI marketing must have been doing something differently. To test this theory, they zeroed in on firms whose CMOs rated the company highly for “developing an inclusive approach to marketing decision-making.” They found that companies rated above average on this score also saw the best business outcomes. “Process trumps spending when it comes to the business impact of DE&I spending in marketing,” the pair write.
Such a conclusion may sound like common sense. But the lesson hasn’t been painfully apparent to the dozens of companies that reported not getting enough for their DEI marketing buck. Nor has it been clear to the many companies that have badly bungled DEI marketing in recent years, producing embarrassing, amateur advertisements or half-hearted efforts to wave the flag of inclusion. Victoria’s Secret, for example, bet its brand on body-positivity imagery without creating a body-positive culture. Its advertising is now reverting to a sex-forward, less inclusive look. Barnes and Noble was ridiculed for a literary Blackface campaign. Budweiser attempted to support trans customers for a hot second, then abandoned trans influencer Dylan Mulvaney in the firestorm of consumer backlash.
Marketers still trying to master inclusive marketing may need to review some of the fundamentals to get it right. They include having a diverse and representative collection of voices in the room at every stage of the project, soliciting feedback from the right constituents, and truly getting to know the full breadth of customers.
The report also calls attention to instructive practices at two Coins2Day 500 companies. Walmart created a diverse panel of employees who review all advertising for the company. And at Salesforce, CEO Marc Benioff once decreed that at any meeting at any level of the company, 30% of people in the room should be women.
This work is all about “embedded processes,” says Moorman. Setting inclusive marketing goals and allocating funds to the cause are important, but they won’t yield results worth bragging about on their own.
Lila MacLellan
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Today’s edition was curated by Ruth Umoh. Join her in NYC on April 25 for a DEI roundtable hosted by FleishmanHillard to discuss what lies ahead for the industry. Space is limited. Sign up here.
What’s Trending
Dept of DEI. Secretary of State Antony Blinken has appointed a chief diversity and inclusion officer at the State Department nearly one year after the role became vacant. NBCNews
Immediate impact. Law student diversity, particularly at elite schools, shrank by up to 17% in the wake of the affirmative action reversal, a new study finds. Reuters
Economic divide. About one in ten Asian Americans lives in poverty, according to a new Pew Research study, which also found that Asian Americans have the most income inequality of any major racial or ethnic group in the U.S. NPR
House of Mouse. The conservative foundation America First, which has backed a host of anti-DEI lawsuits, has now set its sights on Disney, claiming (erroneously) that diversity efforts have tanked the entertainment juggernaut’s value. Hollywood Reporter
The Big Think
An increased focus on health equity is one of the many corporate aftereffects of the pandemic as more employers seek to understand the existing barriers to proper health care for employees of color and ensure all workers have equal access to comprehensive health care.
Black and Indigenous women, for instance, experience higher rates of pregnancy-related deaths than white women. As a result, more companies “have expanded their maternity benefits to cover services like doulas or midwives who improve health outcomes for pregnant people,” writes Coins2Day’s Paige McGlauflin.
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